Data released by S&P Global / CIPS showed that activity in the construction sector fell in October after reaching a 29-month high in September. Business activity expansion was once again led by civil engineering work. Survey respondents widely commented on strong demand for renewable energy infrastructure projects.
UK construction PMI fell to 54.3 points from 57.2 points in September. Economists had expected a decline to 55.5 points. An index value above 50 points indicates an expansion of activity in the sector. The index demonstrates the expansion for the 8th month in a row. The latest reading was also well above the average seen in the first half of 2024 (51.4) and signaled a solid expansion of total industry activity.
The report showed that two of the three categories of construction recorded expansion activity in October. Civil engineering (index at 56.2) was the best-performing category. Commercial work (52.8) also expanded, but the increase was the weakest since April. House building (49.4) registered an overall decline in output during October. This was the first decrease in residential activity since June.
New orders in the construction sector rose again in October (for the 9th month in a row), but the latest expansion was softer than the 2.5 year high seen in September. The weaker growth was driven by political uncertainty and subdued household demand. Meanwhile, the rate of job creation accelerated to a 3-month high. Latest data also indicated that construction companies were the least confident about their output growth projections since December 2023. As for the inflationary situation, the rate of input inflation remained stronger than seen on average in the first half of 2024, but moderated since September.